Dolomite Launches Powerful DeFi Borrowing
We’re very excited to announce that Dolomite’s Borrow capabilities are now live!
The Dolomite Protocol allows for some very powerful and unique lending and borrowing. With this latest release, users will finally be able to leverage those features.
Multiple borrow positions under one wallet
On other lending protocols, your wallet is your borrow position. Any collateral you deposit applies to your entire wallet, any assets you borrow are borrowed against all of your collateral. But this results in limitations.
What if you want one safe, well collateralized borrow position, and one risky one? What if you wanted a small borrow position and a separate large one? What if you wanted one borrow position collateralized with volatile assets, and another with stable assets? Those would require you to use completely separate wallets.
Dolomite takes a new approach. On Dolomite, users can open separate isolated borrow positions from a single wallet. Each position can be collateralized and borrowed against independently.
This makes it easy to have riskier borrow positions that don’t jeopardize the health of safe borrow positions, since each borrow position is liquidated completely independently. This also makes it very easy to manage multiple borrow positions, since it can all be done on one screen, from one wallet, with cumulative information provided from across all your borrow positions.
This is how Dolomite is making DeFi lending easier and more powerful than ever.
Broader asset support means you can borrow like never before
Dolomite isn’t just built to make existing borrowing easier, but to enable entirely new and unique borrowing. This is done through Dolomite’s ability to support a much broader set of assets.
Other lending protocols support around 6 to 12 different assets, maybe a couple dozen on the high end, and these are generally all the same assets — mostly stablecoins and big assets like ETH or WBTC, sometimes requiring you to use a protocol-specific stablecoin. This is DeFi lending in its infancy. Dolomite lending takes it to the next step.
Dolomite’s lending protocol is built to support thousands of assets. This opens the door for some powerful new features:
Borrow against previously idle assets
You, reading this right now, probably have assets sitting idle and inactive in a wallet somewhere, unwilling to sell and unable to use those assets. We want to wake that idle capital up and put it to work where no other protocol has. As Dolomite adds more assets, users will be able to take idle tokens and borrow against them, opening up that capital to be put to work elsewhere.
Enable brand new hedging strategies
Dolomite’s ability to support more exotic assets opens the doors for advanced hedging that was never before possible.
Take an asset like GLP for example — it produces yield, but is exposed to price volatility. Dolomite is built to allow users to take such an asset and borrow against it, allowing users to retain the yield but without the price volatility. As we introduce these new assets, we’ll write articles going more in depth into hedging strategies that can be executed on Dolomite.
Do more with LP tokens
Dolomite’s broad asset support includes AMM pool LP tokens. For liquidity providers, this means that on Dolomite it’s possible to earn interest from lending LP tokens on top of what is already earned from LP fees. So for example, a user who has deposited ETH and USDC into a Dolomite liquidity pool will receive fees from the ETH-USDC AMM pool, and on top of that earn interest on their ETH, their USDC, and their ETH-USDC LP tokens.
For traders, it also opens the door for new strategies. One such example is going long or short on the IL (impermanent loss) of a market. Holding LP tokens on Dolomite is a bet that the fees from the trade volume and lending APR on the market will outweigh the IL from price movement in one direction — essentially going short on IL and long on trading and lending fees. But by borrowing LP tokens and then redeeming them for their component assets, users can go long on the IL and short on fees, instead betting that IL will outweigh the trading fees and borrow APR from the market.
No rent seeking
Dolomite does not charge any form of origination fee or flash loan fee for opening a position. Users only pay accrued interest as the position is kept open. Dolomite was designed to prevent excessive rent seeking and promote imaginative use due to its sound fee design.
This is just the beginning
The launch of Dolomite’s Borrow page only marks the beginning of our journey. We’ll be following it up with the enabling of more assets for borrowing, lending, as well as margin trading on the Dolomite DEX, and we’ll be continuing to build new features that leverage the strengths of the Dolomite Protocol to provide more powerful trading and lending.
Try out Dolomite’s new borrow features at app.dolomite.io/borrow.
If you’d like to be part of this journey with us, we encourage you to join our community of traders and builders on our Discord channel, or follow us on Twitter for updates about Dolomite.
If you’d like to learn more about Dolomite, check out our website at dolomite.io or our docs at docs.dolomite.io.
🏔
